FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "First
Amendment") is entered into as of September 12, 1997 among CHIC BY H.I.S, INC.
(the "Borrower"), the Domestic Subsidiaries of the Borrower (individually a
"Guarantor" and collectively the "Guarantors"), NationsBank, N.A., as Agent (the
"Agent") for the Lenders party to the Credit Agreement defined below (the
"Lenders"). Capitalized terms used herein and not otherwise defined herein have
the respective meanings given to them in the Credit Agreement.
RECITALS
WHEREAS, the Borrower, the Guarantors, the Agent and the Lenders are
parties to an Amended and Restated Credit Agreement dated as of March 17, 1997
(as amended, modified, supplemented or restated from time to time, the "Credit
Agreement");
WHEREAS, the Borrower has requested that the Agent and the Lenders consent
to an amendment of the Credit Agreement; and
WHEREAS, the Agent and the Lenders have agreed to such amendment of the
Credit Agreement on the terms and subject to the conditions contained in this
First Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
I. AMENDMENTS AND RESTATEMENTS
1.1 The definition of "EBITDA" is hereby amended and restated in its
entirety to read as follows:
"EBITDA" means, for any period, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the prior twelve month period,
the sum of (a) Net Income for such period (excluding the effect of any
extraordinary or other non-recurring gains outside of the ordinary course
of business and any non-cash losses incurred prior to the end of the 1996
fiscal year) plus (b) an amount which, in the determination of Net Income
for such period has been deducted for (i) Interest Expense for such
period, (ii) total Federal, state, local, foreign or other income taxes
for such period and (iii) all depreciation and amortization for such
period, all as determined in accordance with
GAAP, except that, with respect to the calculation of the Leverage Ratio
for the third and fourth fiscal quarters of 1997 and the first fiscal
quarter of 1998, EBITDA shall be determined by annualizing the components
thereof for such fiscal quarters (such that EBITDA for the third fiscal
quarter of 1997 shall equal EBITDA for such fiscal quarter multiplied by
four (4), EBITDA for the fourth fiscal quarter of 1997 shall equal the sum
of EBITDA for the third and fourth fiscal quarters of 1997 multiplied by
two (2) and EBITDA for the first fiscal quarter of 1998 shall equal the
sum of EBITDA for the third and fourth fiscal quarters of 1997 and the
first fiscal quarter of 1998 multiplied by one and one-third (1J)).
1.2 The definition of "Leverage Ratio" is hereby amended and restated in
its entirety to read as follows:
"Leverage Ratio" means, at the end of each fiscal quarter of the
Borrower, the ratio of (a) all Funded Debt of the Borrower and its
Subsidiaries to (b) EBITDA.
1.3 The definition of "Revolving Committed Amount" is hereby amended and
restated in its entirety to read as follows:
"Revolving Committed Amount" means THIRTY-FIVE MILLION DOLLARS
($35,000,000) or such lesser amount as the Revolving Committed Amount may
be reduced pursuant to Section 2.1(d) or Section 3.3(c).
1.4 Section 7.2(b) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
(b) Fixed Charge Ratio.
(i) As of the end of the third fiscal quarter of 1997, for the
three month period ending on such date, the Fixed Charge Ratio shall be
greater than or equal to 1.75 to 1.0;
(ii) As of the end of the fourth fiscal quarter of 1997, for
the six month period ending on such date, the Fixed Charge Ratio shall be
greater than or equal to 1.5 to 1.0;
(iii) As of the end of the first fiscal quarter of 1998, for
the nine month period ending on such date, the Fixed Charge Ratio shall be
greater than or equal to 1.25 to 1.0;
(iv) As of the end of the second fiscal quarter of 1998, for
the twelve month period ending on such date, the Fixed Charge Ratio shall
be greater than or equal to 1.0 to 1.0;
(v) As of the end of the third fiscal quarter of 1998, for the
twelve month period ending on such date, the Fixed Charge Ratio shall be
greater than or equal to 1.0 to 1.0; and
(vi) As of the end of the fourth fiscal quarter of 1998 and as
of the end of each fiscal quarter thereafter, for the twelve month period
ending on each such date, the Fixed Charge Ratio shall be greater than or
equal to 1.1 to 1.0.
1.5 Schedule 1.1(a) to the Credit Agreement is hereby amended by
substituting for such schedule revised Schedule 1.1(a) attached hereto.
II. CONDITIONS PRECEDENT
2.1 The effectiveness of this First Amendment is subject to the
satisfaction of each of the following conditions:
(a) The Agent shall have received copies of this First Amendment
duly executed by the Credit Parties.
(b) The Agent shall have received an opinion from counsel to the
Credit Parties, in form and substance satisfactory to the Agent, addressed
to the Agent on behalf of the Lenders and dated as of the date hereof.
(c) Each Lender shall have received a duly executed replacement
Revolving Note of the Borrower in the face amount of such Lender's
Revolving Loan Commitment Percentage of the Revolving Committed Amount (as
amended hereby) in substantially the form of Exhibit 2.5(a) to the Credit
Agreement.
III. MISCELLANEOUS
3.1 The term "Credit Agreement" as used in each of the Credit Documents
shall hereafter mean the Credit Agreement as amended by this First Amendment.
Except as herein specifically agreed, the Credit Agreement is hereby ratified
and confirmed and shall remain in full force and effect according to its terms.
3.2 Each of the Borrower, the Guarantors, the Agent and the Lenders
represents and warrants as follows:
(a) It has taken all necessary action to authorize the execution,
delivery and performance of this First Amendment.
(b) This First Amendment has been duly executed and delivered by the
undersigned and constitutes the undersigned's legal, valid and binding
obligations, enforceable in accordance with its terms, except as such
enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceedin at law or in equity).
(c) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or
third party is required in connection with the execution, delivery or
performance by the undersigned of this First Amendment.
3.3 The Borrower represents and warrants to the Lenders that (a) the
representations and warranties of the Borrower set forth in Section 6 of the
Credit Agreement (as amended by this First Amendment) are true and correct as of
the date hereof and (b) no unwaived event has occurred and is continuing which
constitutes a Default or an Event of Default.
3.4 This First Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument.
3.5 THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NORTH CAROLINA.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this First Amendment to be duly executed and delivered by their proper and duly
authorized officer as of the day and year first above written.
BORROWER:
CHIC BY H.I.S, INC.,
a Delaware corporation
By:
Name:
Title:
GUARANTORS:
XXXXX X. XXXXXX COMPANY, INC.,
a Delaware corporation
By:
Name:
Title:
CHIC HOLDINGS CORP.,
a Delaware corporation
By:
Name:
Title:
CHIC BY H.I.S LICENSING CORPORATION,
a Delaware corporation
By:
Name:
Title:
H.I.S LIMITED,
a Delaware corporation
By:
Name:
Title:
H.I.S. KENTUCKY, INC.,
a Delaware corporation
By:
Name:
Title:
LENDERS:
NATIONSBANK, N.A.,
individually in its capacity as a Lender and
in its capacity as Agent
By:
Name:
Title:
FLEET BANK, N.A.
By:
Name:
Title:
Schedule 1.1(a)
Schedule of Lenders and
Commitments
Revolving
Revolving Loan
Committed Commitment
Lender Amount Percentage
------ ------ ----------
NationsBank, N.A. $23,333,333 66.66%
Fleet Bank, N.A. $11,666,667 33.33%
----------- ------
Total $35,000,000 100%
FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "First
Amendment") is entered into as of September 12, 1997 among CHIC BY H.I.S, INC.
(the "Borrower"), the Domestic Subsidiaries of the Borrower (individually a
"Guarantor" and collectively the "Guarantors"), NationsBank, N.A., as Agent (the
"Agent") for the Lenders party to the Credit Agreement defined below (the
"Lenders"). Capitalized terms used herein and not otherwise defined herein have
the respective meanings given to them in the Credit Agreement.
RECITALS
WHEREAS, the Borrower, the Guarantors, the Agent and the Lenders are
parties to an Amended and Restated Credit Agreement dated as of March 17, 1997
(as amended, modified, supplemented or restated from time to time, the "Credit
Agreement");
WHEREAS, the Borrower has requested that the Agent and the Lenders consent
to an amendment of the Credit Agreement; and
WHEREAS, the Agent and the Lenders have agreed to such amendment of the
Credit Agreement on the terms and subject to the conditions contained in this
First Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
I. AMENDMENTS AND RESTATEMENTS
1.1 The definition of "EBITDA" is hereby amended and restated in its
entirety to read as follows:
"EBITDA" means, for any period, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the prior twelve month period,
the sum of (a) Net Income for such period (excluding the effect of any
extraordinary or other non-recurring gains outside of the ordinary course
of business and any non-cash losses incurred prior to the end of the 1996
fiscal year) plus (b) an amount which, in the determination of Net Income
for such period has been deducted for (i) Interest Expense for such
period, (ii) total Federal, state, local, foreign or other income taxes
for such period and (iii) all depreciation and amortization for such
period, all as determined in accordance with
GAAP, except that, with respect to the calculation of the Leverage Ratio
for the third and fourth fiscal quarters of 1997 and the first fiscal
quarter of 1998, EBITDA shall be determined by annualizing the components
thereof for such fiscal quarters (such that EBITDA for the third fiscal
quarter of 1997 shall equal EBITDA for such fiscal quarter multiplied by
four (4), EBITDA for the fourth fiscal quarter of 1997 shall equal the sum
of EBITDA for the third and fourth fiscal quarters of 1997 multiplied by
two (2) and EBITDA for the first fiscal quarter of 1998 shall equal the
sum of EBITDA for the third and fourth fiscal quarters of 1997 and the
first fiscal quarter of 1998 multiplied by one and one-third (1J)).
1.2 The definition of "Leverage Ratio" is hereby amended and restated in
its entirety to read as follows:
"Leverage Ratio" means, at the end of each fiscal quarter of the
Borrower, the ratio of (a) all Funded Debt of the Borrower and its
Subsidiaries to (b) EBITDA.
1.3 The definition of "Revolving Committed Amount" is hereby amended and
restated in its entirety to read as follows:
"Revolving Committed Amount" means THIRTY-FIVE MILLION DOLLARS
($35,000,000) or such lesser amount as the Revolving Committed Amount may
be reduced pursuant to Section 2.1(d) or Section 3.3(c).
1.4 Section 7.2(b) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
(b) Fixed Charge Ratio.
(i) As of the end of the third fiscal quarter of 1997, for the
three month period ending on such date, the Fixed Charge Ratio shall be
greater than or equal to 1.75 to 1.0;
(ii) As of the end of the fourth fiscal quarter of 1997, for
the six month period ending on such date, the Fixed Charge Ratio shall be
greater than or equal to 1.5 to 1.0;
(iii) As of the end of the first fiscal quarter of 1998, for
the nine month period ending on such date, the Fixed Charge Ratio shall be
greater than or equal to 1.25 to 1.0;
(iv) As of the end of the second fiscal quarter of 1998, for
the twelve month period ending on such date, the Fixed Charge Ratio shall
be greater than or equal to 1.0 to 1.0;
(v) As of the end of the third fiscal quarter of 1998, for the
twelve month period ending on such date, the Fixed Charge Ratio shall be
greater than or equal to 1.0 to 1.0; and
(vi) As of the end of the fourth fiscal quarter of 1998 and as
of the end of each fiscal quarter thereafter, for the twelve month period
ending on each such date, the Fixed Charge Ratio shall be greater than or
equal to 1.1 to 1.0.
1.5 Schedule 1.1(a) to the Credit Agreement is hereby amended by
substituting for such schedule revised Schedule 1.1(a) attached hereto.
II. CONDITIONS PRECEDENT
2.1 The effectiveness of this First Amendment is subject to the
satisfaction of each of the following conditions:
(a) The Agent shall have received copies of this First Amendment
duly executed by the Credit Parties.
(b) The Agent shall have received an opinion from counsel to the
Credit Parties, in form and substance satisfactory to the Agent, addressed
to the Agent on behalf of the Lenders and dated as of the date hereof.
(c) Each Lender shall have received a duly executed replacement
Revolving Note of the Borrower in the face amount of such Lender's
Revolving Loan Commitment Percentage of the Revolving Committed Amount (as
amended hereby) in substantially the form of Exhibit 2.5(a) to the Credit
Agreement.
III. MISCELLANEOUS
3.1 The term "Credit Agreement" as used in each of the Credit Documents
shall hereafter mean the Credit Agreement as amended by this First Amendment.
Except as herein specifically agreed, the Credit Agreement is hereby ratified
and confirmed and shall remain in full force and effect according to its terms.
3.2 Each of the Borrower, the Guarantors, the Agent and the Lenders
represents and warrants as follows:
(a) It has taken all necessary action to authorize the execution,
delivery and performance of this First Amendment.
(b) This First Amendment has been duly executed and delivered by the
undersigned and constitutes the undersigned's legal, valid and binding
obligations, enforceable in accordance with its terms, except as such
enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
(c) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or
third party is required in connection with the execution, delivery or
performance by the undersigned of this First Amendment.
3.3 The Borrower represents and warrants to the Lenders that (a) the
representations and warranties of the Borrower set forth in Section 6 of the
Credit Agreement (as amended by this First Amendment) are true and correct as of
the date hereof and (b) no unwaived event has occurred and is continuing which
constitutes a Default or an Event of Default.
3.4 This First Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument.
3.5 THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NORTH CAROLINA.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this First Amendment to be duly executed and delivered by their proper and duly
authorized officer as of the day and year first above written.
BORROWER:
CHIC BY H.I.S, INC.,
a Delaware corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
GUARANTORS:
XXXXX X. XXXXXX COMPANY, INC.,
a Delaware corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
CHIC HOLDINGS CORP.,
a Delaware corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
CHIC BY H.I.S LICENSING CORPORATION,
a Delaware corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
H.I.S LIMITED,
a Delaware corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
H.I.S. KENTUCKY, INC.,
a Delaware corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
LENDERS:
NATIONSBANK, N.A.,
individually in its capacity as a Lender
and in its capacity as Agent
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
FLEET BANK, N.A.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Schedule 1.1(a)
Schedule of Lenders and
Commitments
Revolving
Revolving Loan
Committed Commitment
Lender Amount Percentage
------ ------ ----------
NationsBank, N.A. $23,333,333 66.66%
Fleet Bank, N.A. $11,666,667 33.33%
----------- ------
Total $35,000,000 100%
